Lyric Opera of Chicago is one of the leading opera companies in the United States. It was founded in Chicago in 1954, under the name 'Lyric Theatre of Chicago' by Carol Fox, Nicolà Rescigno and Lawrence Kelly, with a season that included Maria Callas's American debut in Norma. The company was re-organized by Fox in 1956 under its present name and, after her 1981 departure, it has continued to be of one of the major opera companies in the United States.

The first opera to be performed in Chicago was Bellini's La sonnambula, presented by a traveling opera company on 29 July 1850. Chicago's first opera house opened in 1865 but was destroyed in the Great Fire of Chicago in 1871. The second opera house, the Chicago Auditorium, opened in 1889.

In 1929 the current Civic Opera House on 20 North Wacker Drive was opened, though the Chicago Civic Opera Company itself collapsed in the Great Depression. The old Auditorium continued to produce stage shows and musicals till it closed in 1941.

Resident opera companies began in Chicago in 1910 with the Chicago Grand Opera Company being formed from the remains of the Manhattan Opera Company, which had been founded by Oscar Hammerstein I, and had been squeezed out by the more financially sound Metropolitan Opera. Chicago had this first company for four seasons, then, after no season in 1914/15, it was re-formed as the Chicago Opera Association. This lasted through 1921/22, when it became the Chicago Civic Opera from 1922 until 1932. After no season in 1932/33, the company was re-formed and again named the Chicago Grand Opera Company from 1933 to 1935. From 1936 to 1939, the company was called Chicago City Opera Company, and finally from 1940 to 1946 opera was presented by the Chicago Opera Company. There were no seasons from 1947 until 1953, so opera was presented by other companies on tour. Lyric Opera was formed in 1954 and has continued uninterrupted except for 1967.

Carol Fox, America's first female opera impresario at the age of 28, began her first season in 1954 by bringing Maria Callas for her American debut in the title role of Norma, the first of many electrifying Callas performances in Chicago. However, this first eight-opera season in 1954 was not the result of a long apprenticeship in opera production; Carol Fox, fluent in Italian and French, had studied opera singing for many years, culminating in two years of intensive work in Italy. However, when she realized that performance was not to be in her future, she decided that it lay in bringing the performances of the world's finest artists to her home town of Chicago. 

Fox also used her formidable persuasive powers on artists other than singers: she was able to bring Rudolph Nureyev to make his debut on an American opera stage at the Lyric; Vera Zorina, Alicia Markova, Erik Bruhn and Maria Tallchief also danced at the Lyric, and George Balanchine created choreography for the Lyric. The Italian composer Pino Donati was her artistic director. Bruno Bartoletti was principal conductor, but other conductors included Tullio Serafin, Dimitri Mitropoulos and Artur Rodzinski. Christoph von Dohnányi and Sir George Solti chose the Lyric for their American operatic debuts. Franco Zeffirelli staged operas as did Harold Prince.

Because of her illnesses and her refusal to lower her artistic standards despite the Lyric's dire financial state in 1980, her resignation was sought and given. Carol Fox died a few months later, survived by a daughter Victoria.

Carol Fox was succeeded at the Lyric by her longtime assistant manager, Ardis Krainik (1981–1996). 

In addition to the standard operatic repertoire, Lyric also presents contemporary works. Recent productions have included Harbison's The Great Gatsby (2000–2001), Weill's Street Scene (2001–2002), Floyd's Susannah, Sondheim's Sweeney Todd (2002–2003), and John Adams' Doctor Atomic directed by Peter Sellars. 2012-13 saw the inauguration of Lyric’s American Musical Theater Initiative, encompassing new productions of classic musicals by Richard Rodgers and Oscar Hammerstein II each spring for five seasons: Oklahoma! (2013), The Sound of Music (2014), Carousel (2015), The King and I (2016), and South Pacific (2017)

Composer William Bolcom wrote his most recent opera for Lyric, A Wedding, based on the 1978 film of the same name directed by Robert Altman. It premiered during Lyric's 50th-anniversary season. During the 2015/16 season, the company premiered another commission, Bel Canto by Peruvian composer Jimmy López with a libretto by Nilo Cruz based on the novel by Ann Patchett.

The Lyric Opera productions were broadcast and nationally syndicated by WFMT Radio Network, from 1971 until 2001. The broadcasts ceased then because of a labor dispute with the Chicago Federation of Musicians, American Guild Musical Artists and the International Alliance of Theatrical Stage Employees, over broadcast fees for musicians. The dispute was resolved at the 11th hour for the October 21, 2006 premiere of Richard Strauss's opera Salome starring Deborah Voigt.

Syndicated broadcast of the Lyric Opera resumed in May 2007 on the WFMT network, which was included on XM Satellite Radio before it merged and became SiriusXM Radio.

The company's permanent home is the Civic Opera House, a building which it rented from 1954 until after the 1993 renovations. It is a 1929 structure with an Art Deco interior. Its 3,563-seat capacity makes it the second-largest opera auditorium in North America after the Metropolitan Opera House in New York City. The interior was named The Ardis Krainik Theatre in 1996 in honor of Ardis Krainik, the former General Director, who was responsible for its renovation from 1993 onwards.